How Much Do Software Engineers Really Earn?

If you’re a software engineer, chances are that at some point you considered Silicon Valley for your career. Even if you aren’t considering moving there, it’s a good bet that the Valley is still the first place that comes to mind when you wonder where the best software engineering jobs are.

While it’s true that Silicon Valley and the Bay Area in general offer enticing salaries—an average of $110,554 USD per year, according to Glassdoor—many engineers may not consider the effect that cost of living has on this salary.

This is the focus of a recent study by CodeMentor, which analyzed the “real earnings” of software engineers in 43 cities across the U.S. and around the world to determine the best places for them to work.

“Real earnings” in this case is the value of the salary software engineers earn given the essential costs of living associated with each city, such as rent or mortgage payments, taxes and social security.

The CodeMentor report used a “real earnings formula” to calculate average earnings for a software engineer who lives alone in the city. That formula is:

The biggest effect on real earnings came from taxes and rental costs, both of which vary significantly from city to city.

So which cities are the most affordable, resulting in the highest real earnings for software engineers?

Top U.S. Cities for Software Engineering Salaries

Seattle comes out as the clear winner in the report. The presence of top-tier tech companies such as Microsoft and Amazon serves to put wages on par with Silicon Valley, but the costs for rent are significantly lower – meaning more money in your bank account each month.

Also at the top of the list are Phoenix, Austin and Houston, which offer real earnings above $30,000. However, these cities are still growing their software industries, and so have relatively modest numbers of software engineering job openings in their job market.

Interestingly, New York and Washington D.C. sit at the bottom of the list, even though these two cities have the largest number of openings in the job market. This is largely due to the astronomical cost of rent – averaging as high as $3,000 per month – leaving software engineers working in these cities with real earnings in the $15,000 – $18,000 range.

International Cities with Highest Real Earnings for Software Engineers

The report also analyzes cities outside the U.S., for those who may be considering working abroad. Oslo and Tel Aviv offer the highest real earnings in this group, at an average of $28.1K and $22.9K respectively. However, they also have small – albeit, growing – job markets.

Three Canadian cities also make a good showing: Toronto, Montreal and Vancouver, with real earnings in USD between $16 – $19K, and job markets that are moderate and increasing.

The full report is available and includes a more detailed breakdown of the calculations, methodology and additional analyses of affordability and quality of life across the 43 cities featured.

While salary – or real earnings – alone shouldn’t be the only deciding factor in choosing where you want to pursue your career in software engineering, having this information can help you plan for success.

For more tips on finding a great engineering career, check out Winning Strategies to Land That Great Engineering Job.

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